Section 876 IAC 2-8-7 - Real estate contractsAuthority: IC 25-34.1-2-5
Affected: IC 25-34.1-5
Sec. 7.
(a) The competency and instructional level for subdivisions (1) through (6) and (10) is Level 2. The competency and instructional level for subdivisions (7) through (9) is Level 1. The following are concepts of basic contract law: (1) The following basic contract terms and classifications: (A) Definition of a contract.(C) Bilateral/unilateral.(E) Valid (enforceable)/void (unenforceable) /voidable.(2) The following essential elements of a contract: (A) The following requirements for mutual assent (offer and acceptance): (iv) Termination of offers.(C) Capacity of the parties.(3) The following requirements for reality of consent: (B) Fraud and misrepresentation.(4) Contract law and auction sales as follows: (B) "With reserve" versus "without reserve".(5) Statute of frauds (applied to real estate contracts) as follows: (A) Contracts to sell or convey any interest in real property.(B) Leases of real property exceeding three (3) years in duration.(6) The following discharge of contracts: (A) Agreement of the parties.(C) Impossibility of performance.(7) Assignment of contracts.(8) General rules for interpretation of contracts.(9) The following contract remedies: (B) Specific performance.(10) Other considerations as follows: (A) The following authority to sign: (iv) Need for signature of all parties.(D) "Time is of the essence".(E) Abbreviations in contracts.(G) Who may write contracts.(b) The competency and instructional level for subdivisions (1) through (6) and (8) is Level 3. The competency and instructional level for subdivision (7) is Level 2. The following are concepts of listing contracts and practices: (1) Definition and purpose of listing contracts.(2) Broker's entitlement to a commission as follows: (A) The following requisites for establishing claim to a commission: (i) Broker must be licensed.(ii) Broker must have a valid employment (listing) contract.(B) Ready, willing, and able buyer rule.(C) Procuring cause of sale rule.(3) The following basic types of listing contracts (characteristics of each): (C) Exclusive right to sell.(D) Protection agreement.(4) Multiple listing service arrangements. (Use sample pages from local MLS book for illustration of how the MLS lists properties.)(5) The following listing contract provisions (Introduce listing agreement used on state examination.): (A) Property description.(B) Listing price and terms of sale.(D) Brokerage fee (including computations) as follows: (i) Percentage of sale price (commission).(F) "Override" (or "extender") clause.(6) Property data sheet as follows: (B) Listing agent's responsibilities.(C) Determining square footage.(D) Seller's disclosure of defects.(7) Termination of listing contracts.(8) Practice preparation of listing contracts and property data sheets. (Students should be afforded supervised practice in completing listing contracts and property data sheets. Note the consequences of inadequate or improper preparation of listing contracts and property data sheets.)(c) The competency and instructional level for subdivision (1) is Level 3. The competency and instructional level for subdivision (2) is Level 1. The competency and instructional level for subdivision (3) is Level 2. The following are concepts of sales contracts and practices: (1) The offer to purchase. (Student should be afforded supervised practice in completing an offer to purchase as used on the state examination, including special provisions and modifications by counteroffer, for a variety of fact situations.) (A) The following major contract provisions: (i) Description of the property (including personal property to be included in the sale).(ii) Sale price and payment terms.(iii) Earnest money, and possible forfeiture thereof as follows: (AA) Forms of earnest money and disclosure thereof.(CC) Importance of explaining to buyer and seller the handling of an earnest money deposit.(iv) Type of conveyance and quality of title.(v) Closing and possession dates.(vi) Closing expenses and prorations.(vii) Condition of utilities.(viii) Condition of property in general.(x) Wood destroying insects.(xi) Contingency provisions as follows: (BB) Sale of buyer's present home.(xii) Signature and dates.(B) Offer, acceptance, and delivery (review of legal requirements as applied to this type of contract) as follows: (i) Handling by telephone.(iii) Withdrawal of offer.(C) Submitting the following offers to seller: (i) Other competitive offer.(ii) Conditional "back up" offer.(D) Handling contract modification.(E) Furnishing copies of offers and contracts to buyer and seller.(F) Specific performance.(G) Disclosure by agent that he represents the buyer, the seller, or both.(2) Installment land contracts (Use sample for illustration.) as follows: (A) Definition and purpose.(C) Advantages and disadvantages (from viewpoint of both buyer and seller).(E) Default and foreclosure.(F) Voluntary information.(3) The following options to purchase real estate (Use sample form for illustration.): (A) Definition and purpose.(C) Requirements of options.(D) Right of first refusal. (Distinguish from "option".)Indiana Real Estate Commission; 876 IAC 2-8-7; filed Dec 1, 1989, 5:00 p.m.: 13 IR 641; readopted filed Jun 29, 2001, 9:56 a.m.: 24 IR 3824; readopted filed Jul 19, 2007, 12:57 p.m.: 20070808-IR-876070067RFA; readopted filed November 25, 2013, 9:21 a.m.: 20131225-IR-876130283RFA